Module 5: Candlestick Patterns · Lesson 31/40
9 min 60 XP
A bullish engulfing is a small down candle completely swallowed by a bigger up candle that follows: buyers didn't just win, they erased the previous session entirely. After a downtrend, at a support, it is one of the strongest two-candle reversals. The bearish engulfing is the mirror after an uptrend. The bigger and cleaner the engulfing body, the stronger the message.
A harami is the opposite picture: a big candle, then a small candle that sits *inside* it. Momentum that was strong suddenly shrinks to nothing — the trend ran out of fuel. A bullish harami (big down, then a small candle stalling) hints at a bottom; a bearish harami hints at a top. It is a softer signal than engulfing: it says "the move is tired," not "control flipped." Wait for confirmation.
These are partial engulfings. A piercing line (bullish): after a down candle, the next opens lower but closes back above the midpoint of that down candle — buyers stormed back. A dark cloud cover (bearish) is the mirror: price opens higher then closes back below the midpoint of the prior up candle. The deeper the close into the prior body, the stronger the signal (a full close past it is an engulfing).
A tweezer is two (or more) candles that print the same extreme — matching lows (tweezer bottom) or matching highs (tweezer top). Twice the market tried to break a level and twice it was rejected at the exact same price. That shared floor or ceiling marks a strong line in the sand.